This post originally appeared on the JadoPado Blog and has been re-produced here to preserve the JadoPado historical record.

Our somewhat annual discussion on payments is back with a 2016 (since it’s October!) rather than a 2015 edition!

A while ago (a really long while ago!) I wrote UAE Payment Gateways and followed it up with Understanding Online Payment in the UAE, and then followed that up with The 2014 Edition: Online Payments in the UAE. The payments space has continued to evolve over the last year and a bit, with a number of interesting developments including new entrants and new payment methods such as Bitcoin.

As with last year’s post, I’ve broken this post into a few areas, 1. Merchant Account Providers, 2. Third Party Payment Gateways 3. Integrated Payment Providers and a new addition covering 4. Alternative Payment Methods

Merchant Account Providers

This is an oligopoly situation in the UAE and is currently dominated by:

1. Network International (majority owned by Emirates NBD, with the balance 49% owned by PE house, Abraaj). NI has brought in a new payment gateway product to replace the creaking mess that was MiGS. I’m not entirely sure who or what they licensed, but it may be a white labelled version of CyberSource. They also work directly with CyberSource.

2. Mashreq Bank (an arm of Abdul Aziz Al Ghurair’s far reaching empire). They used to primarily work internally with MiGS, but I’m not sure if they work with anything else (outside of etisalat’s Etisalat Payment Gateway product — keep your distance).

3. National Bank of Abu Dhabi (NBAD), tend to top the earnings rankings in the UAE in terms of banking, and are the second largest lender in the UAE. They work with a number of third party gateway providers.

4. I know that Commercial Bank of Dubai has been sitting on an acquiring license for a number of years and I’m yet to figure out why they haven’t done anything with it. I’d be more than happy to put it to work and turn it into a “lucrative side business” should someone want to connect a few dots ;).

We currently work with NI and have found them to be a strong provider. YMMV. Give them all a look over.

Third Party Payment Gateways

A 3P gateway will generally need to work with either a local or international merchant account provider in order to provide settlement into a merchant account.

1. Telr. Founded by Elias Ghanem, the ex-Head of PayPal for the Middle East. They acquired Innovate Payments in 2014 with an official confirmation at the end of November 2014. I’m not sure who they work with in terms of merchant accounts. They have offices in Singapore as well as Dubai, so it could be someone outside the region.

Update 01st November 2015: I’ve just had a bunch of new information land in my inbox about Telr.

Telr currently work with Mashreq and NBAD and are expecting to roll out in KSA with SAMBA, later this month. Their pricing was updated in September to include a Starter plan in the UAE which covers 0 to AED 20K in volume and has zero transaction fees replacing it instead with a flat monthly cost of AED 349. On AED 20K of volume that is an effective rate of 1.745%. Not a bad deal if you’re close to that threshold and aren’t expecting to cross it.

2. Gate2Play. Interesting firm, part of MEVP‘s portfolio (Regional VC). They license products from PayDIBS in Malaysia as well as Pay.On out of Germany. They work with NBAD in the UAE and with Bank Audi in Lebanon and Jordan, if I recall correctly.

3. PayFort & CashU . A business that was created by Jabbar Internet Group (Founders of Maktoob and investors in and was split into two components in mid 2013. CashU focuses on prepaid card based payments and its sales and distribution network, while PayFort is a more traditional 3PG provider. If I recall correctly they license a product from Ogone Payments (now Igencio). They also have a number of interesting products including pay@home, a cash collection service in the UAE, KSA and Egypt.

While I really like the team at PayFort, my challenge is that they roll up into the Souq Group, which for a merchant looking to scale or compete against Souq and its other businesses is a definite conflict of interest.

PayFort primarily works with NBAD in the UAE.

At end of June 2015, PayFort took over promising payments start up White Payments, founded by Yazin Alirhayim. Yazin describes his journey on the PayFort blog. The vision behind White was to come up with a Stripe style provider for the region. I’ve been told that they’re working on a re-do currently coined PayFort Start. Sidenote: The White Payments blog including this post is a good read!

4. The Checkout team hit the UAE in 2013 and have been actively seeking merchants in the region. They’re headquartered out of London and work with merchant account providers in Europe. Their rates will be competitive if you’re doing volume, and handling and transferring AED is not an issue.

A while back (possibly earlier this year) Checkout started working with Mashreq to provide an additional way to handle AED without having to go out to a provider in Europe, which essentially means they can do some currencies including AED for a bit cheaper than before.

They’re probably at the top of my list given their gorgeous UI, documentation and general feel goodness.

5. CyberSource, is a wholly owned subsidiary of Visa Inc, and set up a local office in late 2012 / early 2013. We’ve been a CyberSource customer with their UK operation for a while. I’m biased, but I like their product (it is very stable, but does feel a touch dated!) and what we’ve been able to build around it. They work primarily with NI but may have added other options.

6. Paytabs. The new kids on the block, based out of Bahrain. I don’t know a whole lot about their technology stack, but my understanding is that it was developed in-house. That worries me a touch as I couldn’t get too many details out of them.

Integrated Payment Providers

1. PayPal. Freshly split from eBay, PayPal remains a dominant player globally. PayPal’s Middle East team continues to be based out of Paris and have sought to actively build both their consumer and merchant businesses in the region. We’ve temporarily dropped them from our payment mix as we re-work our integration to fit with the marketplace, but in general I’ve been happy with the volume and effectiveness of having them in there.

Whenever I hear about someone complaining about their rates being higher than a more traditional setup, I try to point out that you’re paying a premium for access to a global base of over 160 million customers (with a large percentage active) who are already shopping online.

In February 2015, PayPal started allowing Business accounts to withdraw funds to a bank account in the UAE in partnership with Network International. Fees start at 1.75% for amounts from USD 20 to USD 1000, 1.25% for anything from USD 1001 to USD 5000 and move down to 1% for any amounts exceeding USD 5000.

2. 2Checkout. Their model changed a while ago from being a merchant representative to an integrated payments provider. My understanding is that you can accept AED with them and they will transfer out AED to your bank account as well. I’m not sure who they’re handling this with locally or whether they have an FX relationship elsewhere.

Worth exploring if you’re looking to get up and running to test out a concept, with an eye towards a more traditional (and cost effective) set up once you’ve got a bit of volume going.

Alternative Payment Methods

1. Bitcoin. We signed up to BitPay and Coinbase when they first rolled out with the intention of bringing Bitcoin payments to JadoPado, but not having a nice way of going from BTC to AED resulted in a bit of a stalemate. The intention was to set up banking in the US (but that has continued to be challenging, but one that we’ll crack at some point!), go from BTC to USD, move USD to the UAE and then transfer as necessary to AED. *phew*. The AED to USD peg helps, without which taking on FX exposure to support a niche payment method wouldn’t make much sense.

Earlier this year, the fantastic team at YellowPay approached us and said that they’d built all the pieces to make BTC to AED possible. We had a quick look through their product, their super nice documentation and got cracking. A few weeks later, BTC at JadoPado became a reality. If you’re an existing customer, checkout is effectively scanning a QR code on any product page or alternative tapping a link on mobile and jumping right over to your BTC wallet to make payment. Done.

I’m not sure where BTC is headed as a currency but it is clear that as a technology stack it or an iteration of the blockchain, are going to play a part in all of our financial futures. If you’re after supporting and living on the edge, talk to the guys at YellowPay.

Now only if I could figure out how to get some BTC.

2. Cash on Delivery (CoD). While strictly not an alternative payment method, I felt it was important to include cash or the phenomenon of Cash on Delivery given its prevalence across the region. At ArabNet earlier this year, Aramex reported that 76% of the e-commerce transactions that they are seeing across their network use CoD as the payment method. This has actually grown 5 percentage points from 71% in 2011. While I’ve previously passionately spoken out against CoD and why it doesn’t work, I give up. Sellers and would be sellers, watch this space.

More reading:

1. My original post on UAE Payment Gateways back before we started JadoPado.

2. An update that I wrote on the JadoPado Blog back in December 2011, Understanding Online Payments in the UAE. The comments are definitely worth reading.

3. The 2014 Edition: Online Payments in the UAE, if you’re up for a bit of payments nostalgia. Good set of comments too.